Live Events Take Center Stage in Consumer Spending
As consumers feel their budgets come under pressure, people continue to spring for live event tickets, Vivid Seats’ latest earnings results reveal, even as they cut back on retail purchases.
The online ticket resale marketplace reported Tuesday (May 7) that it saw marketplace gross order value (GOV) of more than $1 billion in the first quarter of the year, rising 20% year over year, with revenue increasing by 18%.
On a call with analysts discussing these results, Chief Financial Officer Lawrence Fey addressed investor concerns about how consumers’ constrained discretionary spending would affect their ticket purchasing.
“There’s going to be some skew towards affordability, but beyond that, … nothing we’ve seen suggesting at the broad level any weakening in consumer interests and attending these types of events,” Fey said.
Moreover, the company is seeing generational trends toward spending more on experiences as younger consumers begin making more purchases.
“Frankly, as the demographics move into some of the newer generations who are coming into purchasing power, I think it’s clear that this is a category that they will remain prioritized on their spend,” Vivid Seats CEO Stan Chia noted.
The younger consumer, the more of their paycheck they are likely to spend on recreation, leisure and entertainment activities, per PYMNTS Intelligence data. The April installment of the “New Reality Check: The Paycheck-to-Paycheck Report” series, “Why 60% of Gen Z’s Live Paycheck to Paycheck,” drew from a survey of more than 3,400 U.S. consumers to understand their financial lifestyles, among other things. Gen Z consumers reported expecting to spend 10% of their personal income on these expenses in the month ahead, while millennials expected to spend 8%, Generation X 7%, and baby boomers and seniors 6%.
The same study found that millennials and bridge millennials are the most likely of all consumers to cite paying for an upcoming event or show as their top financial priority.
On the flip side, retail companies are noting this shift away from their offerings. Mattel highlighted in its first-quarter earnings call last month that young parents are spending more on experiences for their kids and less on toys.
“We do expect some decline in 2024, although at a lesser rate than last year,” Chairman and CEO Ynon Kreiz told analysts. “The decline is due to the same factors that impacted 2023 in terms of a lighter theatrical film slate and the impact of a shift in consumer spending towards … experiences and services.”
Overall, consumers are cutting back on purchasing physical products. The February/March edition of the New Reality Check series, “Pessimism About Pay Rises Offsets the Effect of Falling Inflation,” drew from a PYMNTS Intelligence survey of more than 4,300 U.S. consumers. It found that 60% of shoppers have cut down on nonessential retail spending.
“Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending,” McDonald’s CEO Chris Kempczinski told analysts on the fast-food chain’s latest earnings call.
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